WAYTRONX,
INC.
 
 UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON,
D.C. 20549
 
 FORM
10-Q
 
 QUARTERLY
REPORT UNDER SECTION 13 OR 15(D)
 OF THE
SECURITIES EXCHANGE ACT OF 1934
  For
quarter ended March 31, 2009
 
 Commission
File Number 0-29195
 
 WAYTRONX,
INC.
 (Name of
Small Business Issuer in Its Charter)
 
 Colorado
                  (3990)
                  84-1463284(State
      or jurisdiction of
                  (Primary
      Standard Industrial
                  (I.R.S.
      Employerincorporation
      or organization)
                  Classification
      Code Number)
                  Identification
      No.)
 
 20050 SW
112th Avenue
 Tualatin,
Oregon 97062
 (503)
612-2300.
 (Address
and Telephone Number of Principal Executive Offices and Principal Place of
Business)
 
 William
J. Clough, CEO/President
 Waytronx,
Inc.
 20050 SW
112th Avenue
 Tualatin,
Oregon 97062
 (503)
612-2300.
 (Name,
Address and Telephone Number of Agent for Service)
 
 Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.
 YES x NO  ̈
 
 Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Website, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding
12 months (or for such shorter period that the registrant was required to submit
and post such files).
 YES  ̈ NO x
 
 Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange act.
 
 Large accelerated
      filer ̈
                Accelerated filer ̈Non-accelerated
      filer   ̈ (Do
      not check if a smaller reporting company)
                Smaller reporting
      companyx
 
 Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
 YES  ̈ NO x
 
 As of
March 31, 2009, there were 166,698,406 shares of the Company's common stock
outstanding, 50,543 shares of Series A Convertible Preferred Stock outstanding,
no shares of Series B and Series C Convertible Preferred Stock
outstanding.
  
 
 WAYTRONX,
INC.
 
 INDEX
 
 PagePart
      IItem
      1
                                    Financial
      Statements
                                    
                                    3Condensed
      Consolidated Balance Sheets (unaudited)
                                    
                                    3Condensed
      Statements of Operations (unaudited)
                                    
                                    4Condensed
      Statements of Cash Flows (unaudited)
                                    
                                    5Notes
      to the Condensed Financial Statements (unaudited)
                                    
                                    7Accounting
      Policies
                                    
                                    8Item
      2
                                    Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                                    
                                    20Overview
                                    
                                    20Intellectual
      Property
                                    
                                    21Liquidity
      and Capital Resources
                                    
                                    21Results
      of Operations
                                    
                                    22Item
      3.
                                    Controls
      and Procedures
                                    
                                    25Part
      IIItem
      1
                                    Legal
      Proceedings.
                                    
                                    26Item
      1A
                                    Risk
      Factors
                                    
                                    26Item
      2
                                    Unregistered
      Sales of Equity Securities andUse
      of Proceeds
                                    
                                    26Item
      3
                                    Defaults
      Upon Senior Securities
                                    
                                    26Item
      4
                                    Submission
      of Matters to a Vote of Security Holders
                                    
                                    26Item
      5
                                    Other
      Information
                                    
                                    26Item
      6
                                    Exhibits
      and Reports on Form 8-K
                                    
                                    27Signatures
                                    
                                    30Exhibits
  2
  PART I.
FINANCIAL INFORMATION
 Item
1.  Financial Statements
 Waytronx,
Inc.
 Condensed
Consolidated Balance Sheets
 
 March
      31, 2009
                          
                          
                          December
      31,
                            2008(unaudited)Assets:Current
      Assets:Cash
      and cash equivalents
                          
                          $
                          168,891
                          
                          
                          $
                          599,200Trade
      accounts receivable, net of allowance of $135,000
                          
                          
                          2,549,035
                          
                          
                          
                          2,762,416Other
      accounts receivable
                          
                          
                          305,132
                          
                          
                          
                          110,952Other
      accounts receivable, related party
                          
                          
                          195,193
                          
                          
                          
                          194,984Inventories,
      net
                          
                          
                          3,629,464
                          
                          
                          
                          4,077,367Prepaid
      expenses and other
                          
                          
                          378,572
                          
                          
                          
                          186,520Total
      current assets
                          
                          
                          7,226,287
                          
                          
                          
                          7,931,439Property
      and equipment, net
                          
                          
                          1,173,633
                          
                          
                          
                          1,245,203Other
      assets:Investment
      - equity method
                          
                          
                          112,441
                          
                          
                          
                          120,499Technology
      rights, net
                          
                          
                          4,074,574
                          
                          
                          
                          4,134,202Patent
      costs, net
                          
                          
                          554,696
                          
                          
                          
                          558,269Other
      intangible assets, net
                          
                          
                          23,800
                          
                          
                          
                          27,878Deposits
      and other
                          
                          
                          20,934
                          
                          
                          
                          40,411Notes
      receivable, net
                          
                          
                          182,025
                          
                          
                          
                          182,025Debt
      offering costs, net
                          
                          
                          1,448,291
                          
                          
                          
                          1,618,678Goodwill,
      net
                          
                          
                          32,280,955
                          
                          
                          
                          32,281,148Total
      other assets
                          
                          
                          38,697,716
                          
                          
                          
                          38,963,110Total
      assets
                          
                          $
                          47,097,636
                          
                          
                          $
                          48,139,752Liabilities
      and stockholders' equity:Current
      liabilities:Accounts
      payable
                          
                          $
                          665,136
                          
                          
                          $
                          1,106,114Preferred
      stock dividends payable
                          
                          
                          5,054
                          
                          
                          
                          5,054Demand
      notes payable
                          
                          
                          1,510,210
                          
                          
                          
                          1,373,993Accrued
      expenses
                          
                          
                          1,880,382
                          
                          
                          
                          1,912,592Accrued
      compensation
                          
                          
                          710,001
                          
                          
                          
                          770,625Notes
      payable, current portion due
                          
                          
                          50,154
                          
                          
                          
                          49,200Notes
      payable, related party, current portion due
                          
                          
                          1,127,149
                          
                          
                          
                          1,197,865Convertible
      notes payable, net of discounts of $0 and $0, respectively
                          
                          
                          1,350,000
                          
                          
                          
                          1,350,000Total
      current liabilities
                          
                          
                          7,298,086
                          
                          
                          
                          7,765,443Long
      term notes payable, net of current portion due of $50,154 and
      $49,200,
                          
                          
                          6,082,838
                          
                          
                          
                          6,095,740Long
      term notes payable, related party, net of current portion due of $127,149
      and $197,865 and discounts of $571,071 and $638,255,
                          
                          
                          13,057,013
                          
                          
                          
                          13,022,465Long
      term convertible notes payable, related party, net of discounts of
      $5,110,196 and $5,711,395, respectively
                          
                          
                          12,389,804
                          
                          
                          
                          11,788,605Total
      liabilities
                          
                          
                          38,827,741
                          
                          
                          
                          38,672,253Commitments
      and contingencies
                          
                          
                          -
                          
                          
                          
                          -Stockholders'
      equity:Preferred
      stock, par value $0.001; 10,000,000 shares authorized
                          
                          
                          -
                          
                          
                          
                          -Convertible
      Series A preferred stock, 5,000,000 shares authorized, 50,543 shares
      issued and outstanding liquidation preference of $50,543 at March 31, 2009
      and December 31, 2008, respectively
                          
                          
                          51
                          
                          
                          
                          51Convertible
      Series B preferred stock, 30,000 shares authorized, and no shares
      outstanding at March 31, 2009 and December 31, 2008,
      respectively
                          
                          
                          -
                          
                          
                          
                          -Common
      stock, par value $0.001; 325,000,000 and 200,000,000 shares authorized and
      166,698,406 and 166,208,406 shares issued and outstanding at March 31,
      2009 and December 31, 2008, respectively
                          
                          
                          166,698
                          
                          
                          
                          166,208Additional
      paid-in capital
                          
                          
                          59,937,947
                          
                          
                          
                          59,849,326Subscription
      receivable
                          
                          
                          
                          
                          
                          
                          -Accumulated
      deficit
                          
                          
                          (51,834,801
                          )
                          
                          
                          (50,548,086
                          )Total
      stockholders' equity
                          
                          
                          8,269,895
                          
                          
                          
                          9,467,499Total
      liabilities and stockholders' equity
                          
                          $
                          47,097,636
                          
                          
                          $
                          48,139,752
 
 See
accompanying notes to financial statements
 
  3
  Waytronx,
Inc.
 Condensed
Statement of Operations
 (unaudited)
 
 For
      the three months ended March 31,2009
                                      
                                      
                                      2008ConsolidatedRevenues:Product
      Sales
                                      
                                      $
                                      6,087,403
                                      
                                      
                                      $
                                      60,645Revenue
      from freight
                                      
                                      
                                      37,647
                                      
                                      
                                      
                                      -Total
      revenue
                                      
                                      
                                      6,125,050
                                      
                                      
                                      
                                      60,645Cost
      of revenues
                                      
                                      
                                      3,656,155
                                      
                                      
                                      
                                      82,083Gross
      profit (loss)
                                      
                                      
                                      2,468,895
                                      
                                      
                                      
                                      (21,438
                                      )Operating
      expensesSelling,
      general and administrative
                                      
                                      
                                      2,371,165
                                      
                                      
                                      
                                      603,999Research
      and development
                                      
                                      
                                      83,399
                                      
                                      
                                      
                                      341,184Bad
      debt
                                      
                                      
                                      37,743
                                      
                                      
                                      
                                      91,500Total
      operating expenses
                                      
                                      
                                      2,492,307
                                      
                                      
                                      
                                      1,036,683Profit
      (loss) from operations
                                      
                                      
                                      (23,412
                                      )
                                      
                                      
                                      (1,058,121
                                      )Other
      income (expense)Other
      income
                                      
                                      
                                      45,485
                                      
                                      
                                      
                                      2,378Other
      expense
                                      
                                      
                                      (33
                                      )
                                      
                                      
                                      -Investment
      income (loss)
                                      
                                      
                                      (8,058
                                      )
                                      
                                      
                                      -Interest
      expense - intrinsic value of convertible debt, amortization of
      debt offering costs and amortization of
      debt discount
                                      
                                      
                                      (838,771
                                      )
                                      
                                      
                                      (58,967
                                      )Interest
      expense
                                      
                                      
                                      (461,926
                                      )
                                      
                                      
                                      (83,313
                                      )Total
      other income (expense), net
                                      
                                      
                                      (1,263,303
                                      )
                                      
                                      
                                      (139,902
                                      )Net
      profit (loss)
                                      
                                      
                                      (1,286,715
                                      )
                                      
                                      
                                      (1,198,023
                                      )Preferred
      stock dividends
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -Net
      profit (loss) allocable to common stockholders
                                      
                                      $
                                      (1,286,715
                                      )
                                      
                                      $
                                      (1,198,023
                                      )Basic
      and diluted profit (loss) per common share
                                      
                                      $
                                      (0.01
                                      )
                                      
                                      $
                                      (0.01
                                      )Weighted
      average common shares outstanding - basic and diluted
                                      
                                      
                                      166,584,406
                                      
                                      
                                      
                                      159,559,925
 
 See
accompanying notes to financial statements
  4
  Waytronx,
Inc.
 Condensed
Statements of Cash Flows
 (unaudited)
 
 For
      the three months ended March 31,2009
                    
                    
                    2008ConsolidatedCASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      profit (loss)
                    
                    $
                    (1,286,715
                    )
                    
                    $
                    (1,198,023
                    )Adjustments
      to reconcile net profit (loss) to net cash used in operating
      activities:Stock,
      warrants, options and notes issued for compensation and
      services
                    
                    
                    84,212
                    
                    
                    
                    196,208Non-cash
      interest expense, including amortization of beneficial conversion value,
      warrant related debt discounts and intrinsic value of convertible debt and
      amortization of debt discount and amortization of debt offering
      costs
                    
                    
                    838,771
                    
                    
                    
                    47,760Non-cash
      loss on securities available for sale
                    
                    
                    8,058
                    
                    
                    
                    -Bad
      debt expense
                    
                    
                    37,743
                    
                    
                    
                    91,500Amortization
      of technology rights
                    
                    
                    59,628
                    
                    
                    
                    59,629Amortization
      of patent costs
                    
                    
                    4,474
                    
                    
                    
                    5,719Amortization
      of website development
                    
                    
                    3,578
                    
                    
                    
                    3,578Compensation
      and services expense payable in common stock
                    
                    
                    -
                    
                    
                    
                    6,250Depreciation
                    
                    
                    93,332
                    
                    
                    
                    7,001Amortization
      of goodwill
                    
                    
                    193
                    
                    
                    
                    -(Increase)
      decrease in assets:Trade
      accounts receivable
                    
                    
                    (18,542
                    )
                    
                    
                    (23,088
                    )Other
      accounts receivable, related party
                    
                    
                    (209
                    )
                    
                    
                    -Inventory
                    
                    
                    447,903
                    
                    
                    
                    75,930Prepaid
      expenses and other current assets
                    
                    
                    (192,052
                    )
                    
                    
                    (34,071
                    )Deposits
      and other assets
                    
                    
                    19,477
                    
                    
                    
                    11,254Increase
      (decrease) in liabilities:Accounts
      payable
                    
                    
                    (440,978
                    )
                    
                    
                    105,811Accrued
      expenses
                    
                    
                    (32,210
                    )
                    
                    
                    55,403Accrued
      compensation
                    
                    
                    (60,624
                    )
                    
                    
                    (32,102
                    )Deferred
      revenues
                    
                    
                    -
                    
                    
                    
                    (11,070
                    )NET
      CASH USED IN OPERATING ACTIVITIES
                    
                    
                    (433,961
                    )
                    
                    
                    (632,311
                    )CASH
      FLOWS FROM INVESTING ACTIVITIES:Investment
      in patents
                    
                    
                    (901
                    )
                    
                    
                    (26,928
                    )Purchase
      of property and equipment
                    
                    
                    (21,263
                    )
                    
                    
                    -NET
      CASH USED IN INVESTING ACTIVITIES
                    
                    
                    (22,164
                    )
                    
                    
                    (26,928
                    )CASH
      FLOWS FROM FINANCING ACTIVITIES:Proceeds
      from demand notes payable
                    
                    
                    136,217
                    
                    
                    
                    -Proceeds
      from notes and loans payable, related party
                    
                    
                    -
                    
                    
                    
                    75,000Payments
      on notes and loans payable
                    
                    
                    (11,948
                    )
                    
                    
                    -Payments
      on notes and loans payable, related party
                    
                    
                    (103,353
                    )
                    
                    
                    -Proceeds
      from sales of common stock and exercise of warrants and options, net
      of offering costs
                    
                    
                    4,900
                    
                    
                    
                    578,000NET
      CASH PROVIDED BY FINANCING ACTIVITIES
                    
                    
                    25,816
                    
                    
                    
                    653,000NET
      INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
                    
                    
                    (430,309
                    )
                    
                    
                    (6,239
                    )Cash
      and cash equivalents at end of year
                    
                    
                    599,200
                    
                    
                    
                    42,639Net
      increase (decrease) in cash and cash equivalents
                    
                    $
                    168,891
                    
                    
                    $
                    36,400
 
 (continued)
  5
  Waytronx,
Inc.
 Condensed
Statements of Cash Flows (continued)
 (unaudited)
 
 For
      the three months ended March 31,2009
                      
                      
                      2008ConsolidatedSUPPLEMENTAL
      DISCLOSURE OF CASH FLOW INFORMATION:Income
      taxes paid
                      
                      $
                      -
                      
                      
                      $
                      -Interest
      paid
                      
                      $
                      331,304
                      
                      
                      $
                      27,500SUPPLEMENTAL
      DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:Discount
      on debt for intrinsic value of convertible notes payable
                      
                      $
                      668,384
                      
                      
                      $
                      11,208Amortization
      of debt offering costs
                      
                      $
                      170,387
                      
                      
                      $
                      -Common
      stock issued for conversion of Series A preferred stock and
      dividends
                      
                      $
                      -
                      
                      
                      $
                      25Common
      stock issued for services and compensation
                      
                      $
                      -
                      
                      
                      $
                      125,000
 
 See
accompanying notes to financial statements
  6
  Waytronx,
Inc.
 Notes to
the Condensed Consolidated Financial Statements
 (Unaudited)
 
 1.
              BASIS
      OF PRESENTATION AND GOING
CONCERN
 
 Waytronx,
Inc. (formerly known as OnScreen Technologies, Inc.) has pioneered and is
commercializing innovative thermal management solutions capable of
revolutionizing the LED display, semiconductor and electronic packaging
industries. Utilizing patented and patent-pending thermal technologies and
architecture we have developed highly advanced, proprietary LED display
solutions and cooling applications.  Waytronx is primarily focused on
the commercialization of their innovative thermal cooling technology,
WayCool.
 
 Effective
May 16, 2008, Waytronx, Inc. formed a wholly owned subsidiary, Waytronx
Holdings, Inc., to acquire the assets of CUI, Inc., a Tualatin, Oregon based
provider of electronic components including power supplies, transformers,
converters, connectors and industrial controls for Original Equipment
Manufacturers (OEMs). The wholly owned subsidiary was renamed CUI, Inc.
following the close of the acquisition.
  The
accompanying financial statements have been prepared on the assumption that
Waytronx will continue as a going concern.  As reflected in these
financial statements, we had a net loss of $1,286,715 and cash used in
operations of $433,961 for the three months ended March 31, 2009, and an
accumulated deficit of $51,834,801 at March 31, 2009.  These factors
raise substantial doubt about our ability to continue as a going concern
which is dependent upon the ability to bring the WayCool products to
market, generate increased sales, obtain positive cash flow from operations and
raise additional capital as well as grow CUI sales. The financial statements do
not include any adjustments that may result from the outcome of this
uncertainty.
  If
necessary, we will continue to raise additional capital to provide sufficient
cash to meet the funding required to commercialize our technology product
lines.   As we continue to expand and develop technology and
product lines, additional funding may be required.  There has been
negative cash flows from operations and recurring net losses in the past and
there can be no assurance as to the availability or terms upon which additional
financing and capital might be available if needed.
 
 The
accompanying unaudited financial statements have been prepared in accordance
with accounting principles generally accepted in the United States of America
and the rules and regulations of the United States Securities and Exchange
Commission for interim financial information which includes condensed financial
statements.  Accordingly, they do not include all the information and
footnotes necessary for a comprehensive presentation of financial position and
results of operations and should be read in conjunction with the Annual Report,
Form 10-KSB for the year ended December 31, 2008 as well as filings made related
to the acquisition of CUI, Inc.
 
 It is
management's opinion that all material adjustments (consisting of normal
recurring adjustments) have been made which are necessary for a fair financial
statement presentation.  The results for the interim period are not
necessarily indicative of the results to be expected for the year.
  7
  2.
              ACCOUNTING
      POLICIES
 
 Use of
Estimates
 The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities, disclosure of contingent assets and liabilities at the date of the
financial statements, and the reported amounts of revenues and expenses during
the reporting period.  Actual results could differ from those
estimates.  Significant estimates in 2009 and 2008 include estimates
used to review the Company’s long-lived assets for impairment, inventory
valuation, valuations of non-cash capital stock issuances, valuations of
derivatives and the valuation allowance on deferred tax assets.
 
 Principles of
Consolidation
 The
consolidated financial statements include the accounts of Waytronx, Inc. and its
wholly owned subsidiary CUI, Inc. (for the period May 16, 2008 to March 31,
2009) hereafter referred to as the “Company”.  Significant
intercompany accounts and transactions have been eliminated in
consolidation.
 
 Fair Value of Financial
Instruments
 The
carrying amounts of the Company’s cash and cash equivalents, accounts
receivable, restricted cash, prepaid expense and other assets, accounts payable,
accrued liabilities, notes payable and deferred compensation approximate their
fair value due as of March 31, 2009 because of their short-term
natures.
 
 Cash
 Cash
includes deposits at financial institutions with maturities of three months or
less.  The Company at times has cash in banks in excess of FDIC
insurance limits and places its temporary cash investments with high credit
quality financial institutions.  At March 31, 2009, the Company had no
cash balances at financial institutions which were in excess of the FDIC insured
limits.  However, the Company maintained balances of $106,103 in
foreign financial institutions.
 
 Accounts
Receivable
 The
Company grants credit to its customers, with standard terms of Net 30
days.  The Company routinely assesses the financial strength of its
customers and, therefore, believes that its accounts receivable credit risk
exposure is limited.
 
 Inventory
 Inventories
consist of finished products and are stated at the lower of cost or market;
using the first-in, first-out (FIFO) method as a cost flow
convention.  Inventory consists of finished goods.
 
 Furniture, Equipment and
Software
 Furniture,
equipment and software are recorded at cost and include major expenditures,
which increase productivity or substantially increase useful lives.
 
 Maintenance,
repairs and minor replacements are charged to expenses when
incurred.  When furniture and equipment is sold or otherwise disposed
of, the asset and related accumulated depreciation are removed from this
account, and any gain or loss is included in the statement of
operations.
 
 8
  The cost
of furniture, equipment and software is depreciated over the estimated useful
lives of the related assets.  Depreciation is computed using the
straight-line method for financial reporting purposes.  The estimated
useful lives and accumulated depreciation for furniture, equipment and software
are as follows:
 
 Estimated
                            Useful
      LifeFurniture
      and equipment
                          
                          5
      to 7 yearsSoftware
                          
                          3
      to 5
years
  Identifiable Intangible
Assets
 Intangible
assets are stated at cost net of accumulated amortization and
impairment.  Intangible assets other than goodwill, technology rights
and patents are amortized over an estimated useful life of 15
years.  Technology rights are amortized over a twenty year life and
are reviewed for impairment annually.  Patent costs are amortized over
the life of the patent.  Any patents not approved will be expensed at
that time.
 
 Intangible
assets consist of the following as of March 31, 2009:
 
 Technology
      Rights
                                            
                                            $
                                            4,943,965Accumulated
      amortization
                                            
                                            
                                            (869,391
                                            )Net
                                            
                                            $
                                            4,074,574Patent
      costs
                                            
                                            $
                                            585,245Accumulated
      amortization
                                            
                                            
                                            (30,549
                                            )Net
                                            
                                            $
                                            554,696Debt
      offering costs
                                            
                                            $
                                            2,044,646Accumulated
      amortization
                                            
                                            
                                            (596,355
                                            )Net
                                            
                                            $
                                            1,448,291Goodwill
                                            
                                            $
                                            32,282,686Accumulated
      amortization
                                            
                                            
                                            (1,731
                                            )Net
                                            
                                            $
                                            32,280,955Other
      intangible assets
                                            
                                            $
                                            72,933Accumulated
      amortization
                                            
                                            
                                            (49,133
                                            )Net
                                            
                                            $
                                            23,800
  Investment in
Affiliate
 Through
the acquisition of CUI, Inc. the Company obtained 352,589 common shares
representing a 10.47% interest in Test Products International, Inc., hereafter
referred to as TPI.  TPI is a provider of handheld test and
measurement equipment.  The Company also has a demand receivable from
TPI of $179,726 as of March 31, 2009.  The Company enjoys a close
association with this affiliate through common Board of Director membership and
participation, that allows for a significant amount of influence over affiliate
business decisions.  Accordingly, for financial statement purposes,
the Company accounts for its investment in this affiliated entity under the
equity method.
 
 A summary
of the unaudited financial statements of the affiliate as of March 31, 2009 is
as follows:
  9
  Current
      assets
                                      
                                      $
                                      6,758,832Non-current
      assets
                                      
                                      
                                      776,795Total
      Assets
                                      
                                      $
                                      7,535,627Current
      liabilities
                                      
                                      $
                                      5,210,573Non-current
      liabilities
                                      
                                      
                                      1,126,346Stockholders'
      equity
                                      
                                      
                                      1,198,708Total
      Liabilities and Stockholders' Equity
                                      
                                      $
                                      7,535,627Revenues
                                      
                                      $
                                      1,556,080Operating
      Loss
                                      
                                      
                                      (177,428
                                      )Net
      Loss
                                      
                                      
                                      (76,963
                                      )Company
      share of Net Loss at 10.47%
                                      
                                      
                                      (8,058
                                      )Equity
      investment in affiliate
                                      
                                      $
                                      112,441
  Asset
Impairment
 The
Company reviews its long-lived assets for impairment whenever events or changes
in circumstances indicate that the carrying amount of the asset exceeds its fair
value and may not be recoverable.  In performing the review for
recoverability, the future cash flows expected to result from the use of the
asset and its eventual disposition are estimated.  If the sum of the
expected future cash flows (undiscounted and without interest charges) is less
than the carrying amount of the asset, an impairment loss is recognized as the
excess of the carrying amount over the fair value.  Otherwise, an
impairment loss is not recognized.  Management estimates the fair
value and the estimated future cash flows expected.  Any changes in
these estimates could impact whether there was impairment and the amount of the
impairment.
 
 Patent
Costs
 The
Company estimates the patents it has filed have a future beneficial value;
therefore it capitalizes the costs associated with filing for its
patents.  At the time the patent is approved, the patent costs
associated with the patent are amortized over the useful life of the
patent.  If the patent is not approved, at that time the costs will be
expensed.  A change in the estimate of the patent having a future
beneficial value will impact the other assets and expense accounts.
 
 Derivative
Liabilities
 The
Company accounts for its embedded conversion features and freestanding warrants
pursuant to SFAS No. 133, “Accounting for Derivative Instruments and Hedging
Activities”, which requires a periodic valuation of the fair value of derivative
instruments and a corresponding recognition of liabilities associated with such
derivatives. The recognition of derivative liabilities related to the issuance
of shares of common stock is applied first to the proceeds of such issuance, at
the date of issuance, and the excess of derivative liabilities over the proceeds
is recognized as other expense in the accompanying consolidated financial
statements. The recognition of derivative liabilities related to the issuance of
convertible debt is applied first to the proceeds of such issuance as a debt
discount, at the date of issuance, and the excess of derivative liabilities over
the proceeds is recognized as other expense in the accompanying consolidated
financial statements. Any subsequent increase or decrease in the fair value of
the derivative liabilities is recognized as other expense or other income,
respectively. The reclassification of a contract is reassessed at each balance
sheet date. If a contract is reclassified from permanent equity to an asset or a
liability, the change in the fair value of the contract during the period the
contract was classified as equity is accounted for as an adjustment to equity.
If a contract is reclassified from an asset or liability to equity, gains or
losses recorded to account for the contract at fair value during the period that
contract was classified as an asset or a liability are not reversed but instead
are accounted for as an adjustment to equity.
 
 10
  Revenue
Recognition
 The
recognition of revenues requires judgment, including whether a sale includes
multiple elements, and if so, whether vendor-specific objective evidence (VSOE)
of fair value exists for those elements.  Customers receive certain
elements of Waytronx products over a period of time.  These elements
include licensing rights to manufacture and sell our proprietary patent
protected products.  The ability to identify VSOE for those elements
and the fair value of the respective elements could materially impact the amount
of earned and unearned revenue.  Waytronx does not have any history as
to the costs expected to be incurred in granting licensing rights relating to
its products.  Therefore, revenues may be recorded that are not in
proportion to the costs expected to be incurred in performing these
services.
 
 Revenues
in connection with electronic devices and component sales by CUI, Inc. are
recognized at the time the product is shipped to the customer.
 
 Shipping and Handling
Costs
 Amounts
billed to customers in sales transactions related to shipping and handling
represent revenues earned for the goods provided and are included in
sales.  Costs of shipping and handling are included in cost of
revenues.
 
 Stock issued for services to
other than Employees
 Common
stock, stock options and common stock warrants issued to other than employees or
directors are recorded on the basis of their fair value, as required by SFAS
No. 123(R), which is measured as of the date required by EITF
Issue 96-18, “Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring, or in Conjunction with Selling, Goods or
Services.” In accordance with EITF 96-18, the stock options or common stock
warrants are valued using the Black-Scholes option pricing model on the basis of
the market price of the underlying common stock on the “valuation date,” which
for options and warrants related to contracts that have substantial
disincentives to non-performance is the date of the contract, and for all other
contracts is the vesting date. Expense related to the options and warrants is
recognized on a straight-line basis over the shorter of the period over which
services are to be received or the vesting period. Where expense must be
recognized prior to a valuation date, the expense is computed under the
Black-Scholes option pricing model on the basis of the market price of the
underlying common stock at the end of the period, and any subsequent changes in
the market price of the underlying common stock up through the valuation date is
reflected in the expense recorded in the subsequent period in which that change
occurs.
 
 Foreign Currency
Translation
 The
financial statements of the Company's foreign offices have been translated into
U.S. dollars in accordance with SFAS No. 52, Foreign Currency Translation (SFAS
52). All balance sheet accounts have been translated using the exchange rate in
effect at the balance sheet date. Income statement amounts have been translated
using an appropriately weighted average exchange rate for the year. The
translation gains and losses resulting from the changes in exchange rates during
2009 have been reported in accumulated other comprehensive income, except for
gains and losses resulting from the translation of intercompany receivables and
payables, which are included in earnings for the period.
 
 11
  Segment
Reporting
 Upon the
acquisition of CUI, Inc., Waytronx now has operating segments to
report.  The Company has identified four operating segments based on
the products offered.  The four segments are External Power, Internal
Power, Industrial Controls and Other.  The External Power segment is
focused primarily on sales of external power supplies and related
components.  The Internal Power segment is focused primarily on sales
of internal power supplies and related components.  The Industrial
Controls segment is focused primarily on sales of encoding devices and related
components.  The Other category represents activity of segments that
do not meet the threshold for segment reporting and are combined.  For
the three months ended March 31, 2008, the Company only had one
segment.
 
 The
following information is presented for the three months ended March 31, 2009 for
operating segment activity:
 
 External
                        Power
                      
                      
                      Internal
                        Power
                      
                      
                      Industrial
                        Controls
                      
                      
                      Other
                      
                      
                      TotalsRevenues
      from external customers
                      
                      $
                      3,381,718
                      
                      
                      $
                      1,515,120
                      
                      
                      $
                      847,948
                      
                      
                      $
                      380,264
                      
                      
                      $
                      6,125,050Intersegment
      revenues
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -Derivative
      income
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -Interest
      revenues
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      6,818
                      
                      
                      $
                      6,818Equity
      in losses of unconsolidated affiliate
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      (8,058
                      )
                      
                      $
                      (8,058
                      )Interest
      expense - intrinsic value of convertible debt and
      amortization of debt discount
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      838,771
                      
                      
                      $
                      838,771Interest
      expense
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      461,926
                      
                      
                      $
                      461,926Depreciation
      and amortization
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      161,205
                      
                      
                      $
                      161,205Segment
      profit (loss)
                      
                      $
                      806,757
                      
                      
                      $
                      170,735
                      
                      
                      $
                      78,020
                      
                      
                      $
                      (2,342,227
                      )
                      
                      $
                      (1,286,715
                      )Other
      significant non-cash items:Stock,
      warrants and notes issued for compensation and
    services
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      84,212
                      
                      
                      $
                      84,212Segment
      assets
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      47,097,636
                      
                      
                      $
                      47,097,636Expenditures
      for segment assets
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      -
                      
                      
                      $
                      22,164
                      
                      
                      $
                      22,164
 
 The
operating segments do not hold assets individually as segment assets as all
Company assets are utilized for each segment.
 
 Recent Accounting
Pronouncements
 In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “Noncontrolling Interests
in Consolidated Financial Statements – an amendment of ARB No.
51”.  This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require; the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners.  SFAS No. 160
affects those entities that have an outstanding noncontrolling interest in one
or more subsidiaries or that deconsolidate a subsidiary.  SFAS No. 160
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
adoption of this statement did not have a material effect on the Company's
financial statements.
 
 12
  In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” (SFAS 133) as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted.   The adoption of this
statement did not have a material effect on the Company’s financial
statements.
 
 In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS No. 162 identifies the sources of accounting
principles and provides entities with a framework for selecting the principles
used in preparation of financial statements that are presented in conformity
with GAAP. The current GAAP hierarchy has been criticized because it is directed
to the auditor rather than the entity, it is complex, and it ranks FASB
Statements of Financial Accounting Concepts, which are subject to the same level
of due process as FASB Statements of Financial Accounting Standards, below
industry practices that are widely recognized as generally accepted but that are
not subject to due process. The Board believes the GAAP hierarchy should be
directed to entities because it is the entity (not its auditors) that is
responsible for selecting accounting principles for financial statements that
are presented in conformity with GAAP. SFAS 162 is effective 60 days following
the SEC’s approval of PCAOB Auditing Standard No. 6, Evaluating Consistency
of Financial Statements (AS/6). The adoption of FASB 162 is not expected to have
a material impact on the Company’s financial position.
 
 In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity
exists in practice in accounting for financial guarantee insurance contracts by
insurance enterprises under FASB Statement No. 60, Accounting and Reporting by
Insurance Enterprises. This results in inconsistencies in the recognition and
measurement of claim liabilities. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements.  SFAS 163 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. The adoption of FASB 163 did not have
a material impact on the Company’s financial position.
 
 13
  3.
              ACQUISITION
 
 Effective
May 16, 2008, Waytronx acquired CUI, Inc.  The funding for this
acquisition was provided by a $6,000,000 bank note, a $14,000,000 seller’s note,
and a $17,500,000 convertible seller’s note.  The following details
the acquisition:
 
 Purchase
      price
                            
                            $
                            37,500,000Cash
                            
                            
                            183,531Accounts
      receivable, trade
                            
                            
                            2,206,176Accounts
      receivable, other
                            
                            
                            1,159,851Inventory
                            
                            
                            2,654,325Other
      current assets
                            
                            
                            115,666Property
      & equipment, net
                            
                            
                            1,340,313Deposits
      and other assets
                            
                            
                            50,297Technology
      rights
                            
                            
                            51,222Equity
      investment in affiliate
                            
                            
                            122,119Goodwill
                            
                            
                            23,544,300Goodwill
      trademark and tradename CUI
                            
                            
                            4,892,856Goodwill
      trademark and tradename V-Infinity
                            
                            
                            1,373,828Goodwill
      patent pending technology
                            
                            
                            761,962Goodwill
      customer list/base
                            
                            
                            2,103,237Liabilities
      assumed
                            
                            
                            (3,059,683
                            )$
                            37,500,000
  The table
below summarizes the unaudited pro forma information of the results of
operations for the three months ended March 31, 2008 as though the acquisition
had been completed as of January 1, 2008:
 
 2008Gross
      revenue
                          
                          $
                          6,297,686Total
      expenses
                          
                          
                          7,094,103Net
      profit (loss) before taxes
                          
                          $
                          (796,417
                          )Earnings
      per share
                          
                          $
                          (0.00
                          )
  4.
              INCOME (LOSS)PER
      COMMON SHARE
 
 Common
stock equivalents in the three months ended March 31, 2009 and 2008, were
anti-dilutive, thus the diluted weighted average common shares outstanding in
these periods are the same as the basic weighted average common shares
outstanding.
 
 At March
31, 2009 and 2008, respectively, 102,536,736 and 20,086,873 potential common
stock shares are issuable upon the exercise of warrants and options and
conversion of debt to common stock.  These are excluded from computing
the diluted net income (loss) per share at March 31, 2009 and 2008 as the effect
of such shares would be anti-dilutive.
 
 14
  The
following table sets forth the computation of basic earnings per
share:
  Three
      months
                                ended
      March 31,
                                2009Net
      income (loss) for the period
                              
                              $
                              (1,286,715
                              )Weighted
      average number of shares outstanding
                              
                              
                              166,584,406Weighted
      average number of common and common equivalent shares
                              
                              
                              166,584,406Basic
      earnings per share
                              
                              $
                              (0.01
                              )
 
 Three
      months
                                ended
      March 31,
                                2009Net
      profit for the period
                              
                              $
                              (1,286,715
                              )Add:  Adjustment
      for interest and discount amortization on 4% convertible notes (previously
      computed)12%
      convertible notes and discount amortizationAdjusted
      net profit
                              
                              $
                              (1,286,715
                              )Weighted
      average number of shares outstanding
                              
                              
                              166,584,406Add:
      Weighted Average shares assumed to be issued upon conversion of 4%
      convertible notes as of the date of issuance (previously
      computed)
                              
                              
                              -Warrants
      and options as of beginning of period
                              
                              
                              -Warrants
      and options as of date of issue
                              
                              
                              -12%
      convertible notes as of beginning of period
                              
                              
                              -12%
      convertible notes as of date of issue
                              
                              
                              -Weighted
      average number of common and common equivalent shares
                              
                              
                              166,584,406Diluted
      earnings per share
                              
                              $
                              (0.01
                              )
 
 5.
              INCOME
      TAXES
 
 An income
tax benefit has not been recognized for operating losses generated in prior
periods based on uncertainties concerning the ability to generate taxable income
in future periods.  The tax benefit as of the three months ended March
31, 2009 and 2008 is offset by a valuation allowance established against
deferred tax assets arising from operating losses and other temporary
differences, the realization of which could not be considered more likely than
not.  In future periods, tax benefits and related deferred tax assets
will be recognized when management considers realization of such amounts to be
more likely than not.
 
 15
  6.
              WORKING CAPITAL LINE
      OF CREDIT
 
 At March
31, 2009, the Company had a $3,000,000 working capital line of credit with Key
Bank, interest payable monthly at the bank’s prime lending rate less 0.25
percentage points (3.00% at March 31, 2009), maturing July 1,
2009.  At March 31, 2009, the balance outstanding on the line of
credit was $1,510,210.
 
 7.
              STOCK-BASED EMPLOYEE
      COMPENSATION
 
 On
January 5, 2009 the Company Board of Directors received and approved a written
report and recommendations of the Compensation Committee which included a
detailed executive equity compensation report and market analysis and the
recommendations of Compensia, Inc., a management consulting firm that provides
executive compensation advisory services to compensation committees and senior
management of knowledge-based companies.  The Compensation Committee
used the report and analysis as a basis for its formal written recommendation to
the board.  Pursuant to a January 8, 2009 board resolution the 2009
Equity Incentive Plan (Executive), a Non-Qualified Stock Option Plan, was
created and funded with 4,200,000 shares of $0.001 par value common
stock.  The Compensation Committee was appointed as the Plan
Administrator to manage the plan.
 
 The 2009
Equity Incentive Plan (Executive) provides for the issuance of stock options to
attract, retain and motivate executive and management employees and directors
and to encourage these individuals to acquire an equity interest in the Company,
to make monetary payments to certain management employees and directors based
upon the value of the Company’s stock and to provide these individuals with an
incentive to maximize the success of the Company and further the interest of the
shareholders.  The 2009 Plan provides for the issuance of Incentive
Non Statutory Options.  The Administrator of the plan is authorized to
determine the exercise price per share at the time the option is granted, but
the exercise price shall not be less than the fair market value on the date the
option is granted.  Stock options granted under the 2009 Plan have a
maximum duration of 10 years.
 
 On May
15, 2008, the Board of Directors approved the Waytronx, Inc. 2008 Equity
Incentive Plan (“2008 Plan”) for 1,500,000 shares of the Company’s common
stock.  The 2008 Plan provides for the issuance of stock options to
attract, retain and motivate employees, to encourage employees, directors and
independent contractors to acquire an equity interest in the Company, to make
monetary payments to certain employees based upon the value of the Company’s
stock, and provide employees, directors and independent contractors with an
incentive to maximize the success of the Company and further the interest of the
shareholders.  The 2008 Plan provides for the issuance of Incentive
Stock Options and Non Statutory Options.  The Administrator of the
plan shall determine the exercise price per share at the time the option is
granted, but the exercise price shall not be less than the fair market value on
the date the option is granted.  Stock options granted under the 2008
Plan have a maximum duration of 10 years.
  On August
25, 2005, the Board of Directors approved the 2005 Equity Incentive Plan (“2005
Plan”) for 2,000,000 shares of the Company’s common stock.  The 2005
Plan provides for the issuance of stock options to attract, retain and motivate
employees, to encourage employees, directors and independent contractors to
acquire an equity interest in the Company, to make monetary payments to certain
employees based upon the value of the Company’s stock, and provide employees,
directors and independent contractors with an incentive to maximize the success
of the Company and further the interest of the shareholders.  The 2005
Plan provides for the issuance of Incentive Stock Options and Non Statutory
Options.  The Administrator of the plan shall determine the exercise
price per share at the time the option is granted, but the exercise price shall
not be less than the fair market value on the date the option is
granted.  Stock options granted under the 2005 Plan have a maximum
duration of 10 years.
  16
  On June
26, 2000, the Company’s Board of Directors adopted the OnScreen Technologies,
Inc. 2000 Stock Option Plan (the “Plan”).  The Plan provides for the
issuance of incentive stock options (ISO’s) to any individual who has been
employed by the Company for a continuous period of at least six
months.  The Plan also provides for the issuance of Non Statutory
Options (NSO’s) to any employee who has been employed by the Company for a
continuous period of at least six months, and any director or consultant to the
Company.  The Company may also issue reload options as defined in the
plan.  The total number of common shares of common stock authorized
and reserved for issuance under the Plan is 600,000 shares.  The Board
shall determine the exercise price per share in the case of an ISO at the time
an option is granted and such price shall be not less than the fair market value
or 110% of fair market value in the case of a ten percent or greater
stockholder.  In the case of a NSO, the exercise price shall not be
less than the fair market value of one share of stock on the date the option is
granted.  Unless otherwise determined by the Board, ISO’s and NSO’s
granted under the Plan have a maximum duration of 10 years.
 
 There
were no non-vested stock options at December 31, 2008.  The fair value
of each stock option is estimated on the date of grant using a Black Scholes
Pricing Model.  During the three months ended March 31, 2009, the
Company granted 15,000 stock options to employees under the 2008 Plan with the
following assumptions; exercise price of $0.19, volatility of 99%, risk free
interest rate of 0.73% and a term of 2 years.  During the three months
ended March 31, 2009, the Company granted 2,550,273 stock options to employees
and officers under the 2009 Equity Incentive Plan (Executive) with the following
assumptions; exercise price of $0.25, volatility of 99%, risk free interest rate
of 0.76% and a term of 2 years.  Additionally, the Company granted
1,458,000 un-vested stock options to directors under the 2009 Equity Incentive
Plan (Executive) with the following assumptions; exercise price of $0.25,
volatility of 99%, risk free interest rate of 0.75% and a term of 2
years.
 
 The
following information is presented for the stock option activity for the three
months ended March 31, 2009:
 
 Number
      of
                                      Warrants
                                      and
      Options
                                    
                                    
                                    Weighted
                                      Average
                                      Exercise
                                      Price
                                    
                                    Weighted
                                      Average
                                      Remaining
                                      Contract
                                      LifeOutstanding
      at December 31, 2008
                                    
                                    
                                    5,270,000
                                    
                                    
                                    $
                                    0.13
                                    
                                    6.55
      yearsExercised
                                    
                                    
                                    0
                                    
                                    
                                    $
                                    0.00Expired
                                    
                                    
                                    -265,000
                                    
                                    
                                    $
                                    0.20Forfeited
                                    
                                    
                                    -
                                    
                                    
                                    $
                                    -Granted
                                    
                                    
                                    4,023,273
                                    
                                    
                                    $
                                    0.25Outstanding
      at March 31, 2009
                                    
                                    
                                    9,028,273
                                    
                                    
                                    $
                                    0.18
                                    
                                    8.20
      yearsOutstanding
      exercisable at March 31, 2009
                                    
                                    
                                    7,570,273
                                    
                                    
                                    $
                                    0.17
                                    
                                    7.69
      years
  17
  During
the three months ended March 31, 2009, 490,000 shares of common stock were
issued in relation to the exercise of warrants with proceeds of
$4,900.
 
 The
weighted average fair value of warrants and options granted during the periods
are as follows:
 
 2009
                      
                      
                      2008Exercise
      price lower than the market price
                      
                      $
                      -
                      
                      
                      
                      N/AExercise
      price equaled the market price
                      
                      $
                      -
                      
                      
                      
                      N/AExercise
      price exceeded the market price
                      
                      $
                      0.19
                      
                      
                      
                      N/AExercise
      price exceeded the market price
                      
                      $
                      0.25
                      
                      
                      
                      N/A
  8.
              NOTES
      PAYABLE
 
 At
December 31, 2007 eighteen-month secured convertible promissory notes totaling
$1,650,000 were outstanding and in default.  In August 2008, the
Company obtained extension of twelve months on all notes in
default.  At March 31, 2009, $1,000,000 was included in Convertible
notes payable, current portion due.
 
 At
December 31, 2007, twenty-four month secured promissory notes totaling
$1,100,000 were outstanding. $1,000,000 of these promissory notes were from a
related party.  The $1,000,000 outstanding at March 31, 2009, was
included in notes payable, related party, current portion
due.  Interest accrues at 12% per annum, payable monthly, until the
maturity of these notes at which time principal is due.
 
 During
the nine months ended September 30, 2008, 24-month unsecured convertible
promissory notes totaling $700,000 were entered into that had bonus shares
attached totaling 700,000 shares of common stock.  These shares had a
fair value of $125,653 using a Black Scholes Pricing Model.  Interest
accrues at 12% per annum, payable monthly, until the maturity of these notes at
which time the principal is due. The note holders have the right to convert the
note to common stock at $0.25 per share at any time during the term of the note,
and we recognized $188,795 in Additional Paid-in Capital related to the
beneficial conversion feature of these notes due to their immediate
vesting.  During the three months ended September 30, 2008, $200,000
was paid back and $50,000 was converted to equity.  The $350,000
outstanding at March 31, 2009, was included in Convertible notes payable,
current portion due.
 
 Additionally,
the Company utilized three separate notes to fund the acquisition of CUI,
Inc.  A $6,000,000 cash loan from Commerce Bank of Oregon, with a term
of 3 years, paying interest only at the prime rate less 0.50% (4.50% at March
31, 2009), and is secured by personal Letters of Credit from related
parties.
 
 A
$14,000,000 promissory note to International Electronic Device, Inc. (formerly
CUI, Inc.), payable monthly over three years at $30,000 per month including 1.7%
annual simple interest with a balloon payment at the thirty sixth monthly
payment (May 15, 2011), with no prepayment penalty, an annual success fee of
2.3%, and the right of first refusal to the note payee, International Electronic
Device, Inc., relating to any private capital raising transactions of Waytronx
during the term of the note.  There is a discount on debt related to
this note of $571,071.  The current portion of this note is
$127,149.  The net long term balance of this note is
$13,057,013.
 
 18
  A
$17,500,000 convertible promissory note with 1.7% annual simple interest and a
2.3% annual success fee, permitting payee to convert any unpaid principal,
interest and success fee to Waytronx common stock at a per share price of $0.25
and at the end of the three year term (May 15, 2011) giving to Waytronx the
singular, discretionary right to convert any unpaid principal, interest and
success fee to Waytronx common stock at a per share price of
$0.25.  This note also provides a right of first refusal to the note
payee, International Electronic Device, Inc., relating to any private capital
raising transactions of Waytronx during the term of the note.  There
is a discount on debt related to this note of $5,110,196.  The net
long term balance of this note is $12,389,804.
 
 Through
the acquisition of CUI, Inc., the Company has a capital lease note payable of
$132,992 as of March 31, 2009.  The current portion of the capital
lease note is $50,154 as of March 31, 2009.  The capital lease note is
related to office equipment and furniture and is secured by the same office
equipment and furniture.  The capital lease expires September 1,
2011.
 
 9.
              COMMITMENTS
 
 The
Company contracts for the purchase of Yen at future dates in anticipation of
inventory purchases.  If the Company fails to acquire the Yen at the
specified date for the contracted amount, it is obligated to pay the difference
between the contract price and the current exchange price.  The
Company is able to regulate its purchases of inventory and maintains an adequate
line of credit so that management does not anticipate a situation in which the
Company would be unable to fulfill its obligation pursuant to any negotiated
open futures contract.  As of March 31, 2009, the Company does not
have outstanding yen purchase contracts.
 
 10.
              PREFERRED
      STOCK
 
 During
the three months ended March 31, 2009, there was no preferred stock
activity.
 
 11.
              SUBSEQUENT
      EVENTS
 
 In April
2009, Waytronx and a debt holder, Central Finance, LLC, agreed to extend the
term of $1,000,000 of promissory notes payable to October 17, 2009.
 
 In April
2009, Waytronx executed a licensing agreement to market the AMT encoder product
line of rotation encoders utilizing capacitive sensor
technology.   The Company will pay a 15% royalty fee on sales of
AMT products.
 
 In April
2009, a licensing agreement entered into in October 2008 became effective when
the product became ready for market.  The licensing agreement provides
the Company with the rights to market the C14 panel mount optical encoder that
has a 2-bit quadrature resolution.  The Company will pay a 15% royalty
fee on sales of C14 products.
 
 In May
2009, Waytronx and a debt holder, IED, Inc., agreed to amend the
$17,500,000 convertible promissory note related to the acquisition of CUI,
Inc.  by reducing the conversion rate from $0.25 to $0.07 per share to
reflect the stock price for the ten day trailing average preceding April 24,
2009, the date of the agreement.  The agreement specifically retains the
total maximum convertible shares at 70,000,000 as stated in the original
Note.  This amendment effectively reduces the Note principal from
$17,500,000 to $4,900,000.
  19
  Item
2.  Management’s Discussion and Analysis of Financial Condition
and
 Results
of Operations.
 
 General
 
 Management’s
discussion and analysis contains various “forward looking
statements.”  Such statements consist of any statement other than a
recitation of historical fact and can be identified by the use of
forward-looking terminology such as “may,” “expect,” “anticipate,” “estimate,”
or “continue” or use of negative or other variations or comparable
terminology.
 
 Waytronx
cautions that these forward-looking statements are further qualified by
important factors that could cause actual results to differ materially, are
necessarily speculative, and there are certain risks and uncertainties that
could cause actual events or results to differ materially from those referred to
in such forward-looking statements.
 
 Overview
 
 Waytronx,
Inc. has pioneered and is commercializing innovative thermal management
solutions capable of revolutionizing the semiconductor, solar and electronic
packaging industries, among others.  This advanced technology involves
the use of fluid displacement to move heat away from the source instead of
traditional passive heat transference through solid
materials.  Utilizing its patented WayCool hybrid mesh architecture,
Waytronx can enhance system performance and remove thermal barriers caused by
"microwarming" in today's advanced computing devices.  The Company's
proprietary cooling solutions for central and graphics processors, solar energy
devices and power supplies provide more cost effective and efficient thermal
management to the electronics industry.
 
 In May
2008, Waytronx formed a wholly owned subsidiary that acquired the assets of CUI,
Inc., a provider of electromechanical components and industrial controls for OEM
manufacturing.  Since its inception in 1989, CUI has been delivering
quality products, extensive application solutions, and superior personal
service.  CUI's solid customer commitment and honest corporate message
are a hallmark in the industry.
 
 During
the three months ended March 31, 2009, Waytronx continued to incur losses from
operations.  A net loss of $1,286,715 was incurred for the three
months ended March 31, 2009.  This net loss is primarily the result of
interest expenses (both cash and non-cash) associated with debt.
  Management
has continued to raise the capital needed to fund the development and marketing
of its products as well as the acquisition of CUI during 2008 and the first
three months of 2009.  During the three months ended March 31, 2009,
proceeds of $4,900 were raised from the exercise of warrants.  These
funds have assisted in the continuing development of products, in funding
operations during development of the WayCoolTM products and the efforts to
license the manufacture and sales of these products, as well as funding the
acquisition and operations of of CUI, Inc.  The Company has also
utilized the bank line of credit to fund operations.  It is
anticipated that Waytronx and CUI will continue to develop and expand its
technology and product lines which may require additional funding.
 
 20
  Intellectual
Property
 
 The
Company relies on various intellectual property laws and contractual
restrictions to protect its proprietary rights in products, logos and services.
These include confidentiality, invention assignment, and nondisclosure
agreements with employees, contractors, suppliers and strategic partners. The
confidentiality and nondisclosure agreements with employees, contractors and
suppliers are in perpetuity or for a sufficient length of time so as to not
threaten exposure of proprietary information.
 
 Waytronx
continues to file and protect its intellectual property rights, trademarks and
products through filings with the US Patent and Trademark Office and, as
applicable, internationally.
 
 Liquidity
and Capital Resources
  General
 Cash and
cash equivalents at March 31, 2009 are $168,891, and there is net working
capital deficit of $71,799.  Operations and investments in patents and
equipment have been funded through cash from operations, the bank line of credit
and proceeds from the exercise of warrants and options during the three month
period.
 
 Cash used in
operations
 Operating
requirements generated a negative cash flow from operations of $433,961 for the
three months ended March 31, 2009, versus $632,311 for the same period last
year.  The decreasein cash used in
operations is primarily the result of a decrease in stock, warrants, options and
notes issued for compensation and services, increased non-cash interest expense,
a decrease in bad debt expense, increase in depreciation, increase in trade
accounts receivable, a decrease in inventory levels, increased prepaid expenses
and other current assets, decreases in accounts payable, and decreases in
accrued expenses and compensation.
  During
the first three months of 2009 stock options have been used as a form of payment
to certain consultants, note holders, employees and directors.  For
the first three months of 2009 and 2008, a total of $84,212 and $196,208,
respectively, was recorded for compensation and services expense including
amortization of deferred compensation related to equity given, or to be given,
to employees, directors and consultants for services provided.
 As
Waytronx continues to focus on the commercialization of its innovative thermal
cooling technology during 2009 and the expansion of CUI product lines, it will
continue to fund research and development related to the WayCoolTM products and
CUI products as well as sales and marketing efforts.
  Capital Expenditures and
Investments
 During
the first three months of 2009 and 2008, there was $21,263 and $0 investment in
property and equipment, respectively.
 
 Waytronx
invested $901 in patent costs during the first three months of 2009 as compared
to $26,928 for the same period last year.  It is expected that
investment in patent costs will continue throughout 2009 as patents are pursued
in order to protect the rights to use its product developments.
 
 Financing
activities
 During
the first three months of 2009, $136,217 of proceeds were received from the bank
line of credit and $4,900 was received from the exercise of
warrants.  The Company made payments on notes and loans payable of
$11,948 and on notes and loans payable, related party of
$103,353.  Waytronx plans on raising the capital needed to fund the
further development and marketing of its products as well as payment of its debt
obligations.
 21
  Recap of liquidity and
capital resources
 The
report of our independent registered public accounting firm on our financial
statements as of December 31, 2008 contains an explanatory paragraph expressing
substantial doubt with respect to our ability to continue as a going
concern.  Prior to the acquisition of CUI, Inc. the Company was not
generating significant revenues to fund operations.  Subsequent to the
acquisition of CUI, Inc., management believes the Company is generating
sufficient revenues to fund operations.  As of March 31, 2009 the
Company had an accumulated deficit of $51,834,801.
  The
Company will seek to raise additional capital as needed for the
commercialization of its WayCool technology product lines as well as the
continued development and expansion of the CUI product lines and
technology.  As needed, the Company will attempt to raise these funds
through borrowing instruments or issuing additional equity.
 
 As of
March 31, 2009 CUI, Inc. maintained a line of credit with Key Bank granting
borrowings of up to $3,000,000 with interest payable monthly at the bank’s prime
lending rate less 0.25 percentage points.
 
 Management
continues to commercialize and otherwise develop its proprietary WayCool and
WayFast Technologies.  Negotiations are continuing with BAE Systems, the
North American Division of British Aerospace, to explore uses for the WayCool
Thermal Management in several BAE/Government projects.  While Management
does not expect immediate commercial revenue from the technology, it is expected
to generate significant research & development and non-recurring engineering
revenues to the company in the next several months.  There is no
assurance that it will generate material revenues by that date or that revenues
will be sufficient to cover all operating and other expenses.
  The
Company expects the revenues from CUI to help cover operating and other expenses
for the next twelve months of operations.  If revenues are not
sufficient to cover all operating and other expenses, other funding will be
required.  There is no assurance that such additional capital will be
able to be raised.
  Results
of Operations
 
 Revenue
 During
the three months ended March 31, 2009 and 2008, revenue was $6,125,050 and
$60,645, respectively.  The revenue for the three months ended March
31, 2009 is comprised of $6,060,901  from CUI products, $37,647 for
freight, and $26,502 from RediAlertTM products.  The revenue for the
three months ended March 31, 2008 is comprised of $58,975 from Living WindowTM
products and related add-ons, and $1,670 from other income.
 
 Cost of
revenue
 The cost
of revenue for the three months ended March 31, 2009 and 2008, was $3,656,155
and $82,083, respectively.
 
 Selling, General and
Administrative Expenses
 Selling,
General and Administrative (SG&A) expenses include such items as wages,
commissions, consulting, general office expenses, business promotion expenses
and costs of being a public company, including legal and accounting fees,
insurance, and investor relations.
 
 22
  For the
three months ended March 31, 2009 compared to the same period in 2008, SG&A
expenses increased $1,767,166, with the majority of this increase associated
with the acquisition of CUI and its operations.
 
 Research and
Development
 The
research and development costs are related to the technology for which Waytronx
acquired the licensing rights as well as research and development expenses for
CUI products.  Research and development costs were $83,399 and
$341,184, for the three months ended March 31, 2009 and 2008,
respectively.
 
 Bad Debt
 The bad
debt expense for the three months ended March 31, 2009 and 2008 was $37,743 and
$91,500, respectively.  The bad debt expense for the three months
ended March 31, 2009, relates to miscellaneous customers.  The bad
debt expense for the three months ended March 31, 2008 relates to a note
receivable from the settlement gain from Mobil Magic.  Mobil Magic
remains in default on the note, and Waytronx has not received a payment on this
note since January of 2008.  The Company has reserved fully for the
note and is pursuing collection of the balance of $91,500 but the outcome of the
collections process is uncertain.
 
 Other
Income
 Other
income for the three months ended March 31, 2009, consisted of $29,200 for
services billed to a related party, $6,818 for interest income, $8,883 for
foreign exchange gain, $584 in other income and a loss on equity investment in
affiliate of $8,058.
  Convertible debt and
amortization of debt discount and debt offering costs
 The
Company recorded an expense of $838,771 for the three months ended March 31,
2009, and $58,967 for the same periods in 2008, for the amortization of debt
discount and debt offering costs.  The increased expense in 2009 of
$779,804 for the three month period was due to the increase in debt used to fund
the acquisition of CUI, Inc.
  Interest
Expense
 The
interest expense of $461,926 and $83,313 for the three months ended March 31,
2009 and 2008, respectively, is for interest on the secured convertible notes
payable, bank operating line of credit, and secured and unsecured promissory
notes.  The increase as compared to the prior year period is related
to the notes associated with the acquisition of CUI, Inc. and debt obtained
during  2008 to fund the operations of Waytronx.
 
 Preferred Stock
Dividends
 No
preferred dividend expense was recorded by the Company during the three months
ended March 31, 2009 and 2008, as during 2006 all Series A and B Convertible
Preferred shareholders accepted the Company’s offer to receive all outstanding
dividends through March 2006 in either cash or common shares at a per share
price of $0.20.
 
 Critical
Accounting Policies
 
 Our
financial statements and related public financial information are based on the
application of accounting principles generally accepted in the United States
(“GAAP”). GAAP requires the use of estimates; assumptions, judgments and
subjective interpretations of accounting principles that have an impact on the
assets, liabilities, revenue and expense amounts reported. These estimates can
also affect supplemental information contained in our external disclosures
including information regarding contingencies, risk and financial condition. We
believe our use if estimates and underlying accounting assumptions adhere to
GAAP and are consistently and conservatively applied. We base our estimates on
historical experience and on various other assumptions that we believe to be
reasonable under the circumstances. Actual results may differ materially from
these estimates under different assumptions or conditions. We continue to
monitor significant estimates made during the preparation of our financial
statements.
  23
  Our
significant accounting policies are summarized in Note 2 of our financial
statements. While all these significant accounting policies impact its financial
condition and results of operations, we view certain of these policies as
critical. Policies determined to be critical are those policies that have the
most significant impact on our financial statements and require management to
use a greater degree of judgment and estimates. Actual results may differ from
those estimates. Our management believes that given current facts and
circumstances, it is unlikely that applying any other reasonable judgments or
estimate methodologies would cause effect on our results of operations,
financial position or liquidity for the periods presented in this
report.
 
 Recent
Accounting Pronouncements
 
 In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
160, “Noncontrolling Interests
in Consolidated Financial Statements – an amendment of ARB No.
51”.  This statement improves the relevance, comparability, and
transparency of the financial information that a reporting entity provides in
its consolidated financial statements by establishing accounting and reporting
standards that require; the ownership interests in subsidiaries held by parties
other than the parent and the amount of consolidated net income attributable to
the parent and to the noncontrolling interest be clearly identified and
presented on the face of the consolidated statement of income, changes in a
parent’s ownership interest while the parent retains its controlling financial
interest in its subsidiary be accounted for consistently, when a subsidiary is
deconsolidated, any retained noncontrolling equity investment in the former
subsidiary be initially measured at fair value, entities provide sufficient
disclosures that clearly identify and distinguish between the interests of the
parent and the interests of the noncontrolling owners.  SFAS No. 160
affects those entities that have an outstanding noncontrolling interest in one
or more subsidiaries or that deconsolidate a subsidiary.  SFAS No. 160
is effective for fiscal years, and interim periods within those fiscal years,
beginning on or after December 15, 2008. Early adoption is prohibited. The
adoption of this statement did not have a material effect on the Company's
financial statements.
 
 In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative
Instruments and Hedging Activities, an amendment of FASB Statement No. 133”
(SFAS 161). This statement is intended to improve transparency in financial
reporting by requiring enhanced disclosures of an entity’s derivative
instruments and hedging activities and their effects on the entity’s financial
position, financial performance, and cash flows. SFAS 161 applies to all
derivative instruments within the scope of SFAS 133, “Accounting for Derivative
Instruments and Hedging Activities” (SFAS 133) as well as related hedged items,
bifurcated derivatives, and nonderivative instruments that are designated and
qualify as hedging instruments. Entities with instruments subject to SFAS 161
must provide more robust qualitative disclosures and expanded quantitative
disclosures. SFAS 161 is effective prospectively for financial statements issued
for fiscal years and interim periods beginning after November 15, 2008,
with early application permitted.  The adoption of this statement did
not have a material effect on the Company’s financial statements.
 
 24
    In May
2008, the FASB issued SFAS No. 163, “Accounting for Financial Guarantee
Insurance Contracts-an interpretation of FASB Statement No. 60.” Diversity
exists in practice in accounting for financial guarantee insurance contracts by
insurance enterprises under FASB Statement No. 60, Accounting and Reporting by
Insurance Enterprises. This results in inconsistencies in the recognition and
measurement of claim liabilities. This Statement requires that an insurance
enterprise recognize a claim liability prior to an event of default (insured
event) when there is evidence that credit deterioration has occurred in an
insured financial obligation. This Statement requires expanded disclosures about
financial guarantee insurance contracts. The accounting and disclosure
requirements of the Statement will improve the quality of information provided
to users of financial statements.  SFAS 163 is effective for financial
statements issued for fiscal years beginning after December 15, 2008, and
interim periods within those fiscal years. The adoption of FASB 163 did not have
a material impact on the Company’s financial position.
  Off-Balance
Sheet Arrangements
  None.
 
 Item
3.  Quantitative and Qualitative Disclosure about Market
Risk
 
 A smaller
reporting company, as defined by Rule 229.10(f)(1), is not required to provide
the information required by this Item.
 
 Item
4T.  Controls and Procedures
 
 Within 90
days prior to the filing of this report, the Company carried out an evaluation,
under the supervision and with the participation of its management, including
the Chief Executive Officer and Chief Financial Officer, of the design and
operation of its disclosure controls and procedures.  Based on this
evaluation, the Company’s Chief Executive Officer and Chief Financial Officer
concluded that the Company’s disclosure controls and procedures are effective
for the gathering, analyzing and disclosing the information the Company is
required to disclose in the reports it files under the Securities Exchange Act
of 1934, within the time periods specified in the SEC’s rules and
forms.  There have been no significant changes in the Company’s
internal controls or in other factors that could significantly affect internal
controls subsequent to the date of this evaluation.
 
 (a) Our
management, including the principal executive officer and principal financial
officer, do not expect that our disclosure controls and procedures will prevent
all error and fraud.  A control system, no matter how well conceived
and operated, can only provide reasonable, not absolute, assurance that the
objectives of the control system are met.  Further, the design of a
control system must reflect the fact that there are resource constraints, and
the benefits of controls must be considered relative to their
costs.  Because of the inherent limitations in all control systems, no
evaluation of controls can provide absolute assurance that all control issues
and instances of fraud, if any, within our Company have been
detected.  These inherent limitations include the realities that
judgments in decision-making can be faulty, and that breakdowns can occur
because of simple error or mistake.  Additionally, controls can be
circumvented by the individual acts of some persons, collusion of two or more
people, or by management override of the control.  The design of any
system of controls also is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future
conditions.
  25
  (b)  Changes
in internal controls over financial reporting.
 
 We have
not identified any significant deficiency or material weaknesses in our internal
controls, and therefore there were no corrective actions taken.
 
 
 PART
II – OTHER INFORMATION
 
 Item
1.  Legal Proceedings.
 
 None.
 
 Item
1A:  Risk Factors.
 
 A smaller
reporting company is not required to provide the information required by this
Item.
 
 Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds.
 
 The
Company relied on Section 4(2) of the Securities Act of 1933 as the basis for an
exemption from registration for the following issuances.
 
 Common
Stock Issued
 
 During
the three months ended March 31, 2009, the Company issued the following common
stock:
 
 490,000
shares of common stock were issued in relation to the exercise of warrants with
proceeds of $4,900.
 
 Item
3.  Defaults upon Senior Securities.
 
 None.
 
 Item
4.  Submission of Matters to a Vote of Security Holders.
 
 None.
 
 Item
5.  Other Information.
 
 Nominating
Committee
 
 26
  The
nominating committee consists of all of the members of the Board of Directors
who are "independent directors" within the meaning of Rule 4200(a)(15) of the
Nasdaq Stock Market.  The nominating committee is responsible for the
evaluation of nominees for election as director, the nomination of director
candidates for election by the shareholders and evaluation of sitting
directors.  The Board has not developed a formal policy for the
identification or evaluation of nominees.  In general, when the Board
determines that expansion of the Board or replacement of a director is necessary
or appropriate, the nominating committee will review, through candidate
interviews with members of the Board and management, consultation with the
candidate's associates and through other means, a candidate's honesty,
integrity, reputation in and commitment to the community, judgment, personality
and thinking style, willingness to invest in the Company, residence, willingness
to devote the necessary time, potential conflicts of interest, independence,
understanding of financial statements and issues, and the willingness and
ability to engage in meaningful and constructive discussion regarding Company
issues.  The committee would review any special expertise, for
example, that qualifies a person as an audit committee financial expert,
membership or influence in a particular geographic or business target market, or
other relevant business experience.  To date the Company has not paid
any fee to any third party to identify or evaluate, or to assist it in
identifying or evaluating, potential director candidates.
 
 The
nominating committee will consider director candidates nominated by shareholders
during such times as the Company is actively considering obtaining new
directors.  Candidates recommended by shareholders will be evaluated
based on the same criteria described above.  Shareholders desiring to
suggest a candidate for consideration should send a letter to the Company's
Secretary and include: (a) a statement that the writer is a shareholder
(providing evidence if the person's shares are held in street name) and is
proposing a candidate for consideration; (b) the name and contact information
for the candidate; (c) a statement of the candidate's business and educational
experience; (d) information regarding the candidate's qualifications to be
director, including but not limited to an evaluation of the factors discussed
above which the Board would consider in evaluating a candidate; (e) information
regarding any relationship or understanding between the proposing shareholder
and the candidate; (f) information regarding potential conflicts of interest;
and (g) a statement that the candidate is willing to be considered and willing
to serve as director if nominated and elected.  Because of the small
size of the Company and the limited need to seek additional directors, there is
no assurance that all shareholder proposed candidates will be fully considered,
that all candidates will be considered equally, or that the proponent of any
candidate or the proposed candidate will be contacted by the Company or the
Board, and no undertaking to do so is implied by the willingness to consider
candidates proposed by shareholders.
 
 Item
6.  Exhibits and Reports on Form 8-K
 
 Exhibits
 
 The
following exhibits are included as part of this Form 10-Q.
 
 Exhibit No.
                
                Description3.11
                
                Amended
      Articles of Incorporation3.21
                
                Bylaws
      of the Registrant.3.32
                
                Articles
      of Amendment to Certificate of Incorporation - Certificate of
      Designations, Preferences, Limitations and Relative Rights of the Series A
      Preferred Stock, filed July 25, 2002.3.42
                
                Articles
      of Amendment to Articles of Incorporation-Terms of Series A Convertible
      Preferred Stock, filed November 13,
2003.
  27
 
 3.52
                
                Restated
      Articles of Incorporation to increase the authorized common stock to
      150,000,000 shares, filed December 23, 2003.3.62
                
                Restated
      Articles of Incorporation - Certificate of Designations of the Series B
      Convertible Preferred Stock, filed April 1, 2004.3.74
                
                Restated
      Articles of Incorporation, Officers’ Certificate and Colorado Secretary of
      State Certificate filed June 30, 2004 showing corporate name change to
      OnScreen Technologies, Inc.3.87
                
                Restated
      Articles of Incorporation and Colorado Secretary of State Certificate
      filed January 7, 2008 showing corporate name change to Waytronx,
      Inc.3.98
                
                Restated
      Articles of incorporation to increase the authorized common shares to
      325,000,000 shares.4.11
                
                Investment
      Agreement dated May 19, 2000 by and between the Registrant and Swartz
      Private Equity, LLC.4.21
                
                Form
      of "Commitment Warrant" to Swartz Private Equity, LLC for the purchase of
      1,000,000 shares common stock in connection with the offering of
      securities.4.31
                
                Form
      of "Purchase Warrant" to purchase common stock issued to Swartz Private
      Equity, LLC from time to time in connection with the offering of
      securities.4.41
                
                Warrant
      Side-Agreement by and between the Registrant and Swartz Private Equity,
      LLC.4.51
                
                Registration
      Rights Agreement between the Registrant and Swartz Private Equity, LLC
      related to the registration of the common stock to be sold pursuant to the
      Swartz Investment Agreement.10.12
                
                Employment
      Agreement between the Registrant and John Thatch dated November 2,
      1999.10.22
                
                Contract
      and License Agreement between the Registrant and John Popovich, dated July
      23, 2001.10.32
                
                Agreement
      by and among the Registrant, John Popovich and Fusion Three, LLC, dated
      January 14, 2004.10.42
                
                Letter
      Agreement between the Registrant and John Popovich, dated January 15,
      2004.10.52
                
                Master
      Settlement and Release Agreement by and among the Registrant, Fusion
      Three, LLC, Ryan Family Partners, LLC, and Capital Management Group, Inc.,
      dated February 3, 2004.10.62
                
                First
      Amendment to Contract and License Agreement, dated February 3,
      2004.10.72
                
                Employment
      Agreement between the Registrant and Mark R. Chandler, COO/CFO, dated
      December 16, 2003.10.82
                
                Employment
      Agreement between the Registrant and Stephen K. Velte, CTO dated November
      7, 2003.10.95
                
                Letter
      of Intent for Sale and Purchase of Certain Intellectual Property dated
      June 10, 2005 with Extension of Letter of Intent dated October 12,
      2005.10.103
                
                Consulting
      Services Agreement by and among the Registrant, David Coloris, Excipio
      Group, S.A., dated November 22, 2003.10.112
                
                Commission
      Agreement between the Registrant and Gestibroker dated September 12,
      2003.10.122
                
                Addendum
      to Safety Harbor office, Suite 210, Lease Agreement dated February 1,
      2004.10.134
                
                Safety
      Harbor, Florida office, Suite 130, Lease Agreement dated October 15,
      2004.10.144
                
                Second
      Addendum to the Employment Agreement of John “JT” Thatch dated February 3,
      2004.10.152
                
                Lockup
      Agreement between the Registrant and Excipio Group, S.A., dated December
      22, 2003.10.162
                
                Agreement
      between the Registrant and Visual Response Media Group, Inc., dated
      February 3, 2004.
  28
 
 10.174
                
                Assignment,
      dated February 16, 2005, of Registrant’s technology patents ownership from
      inventor to CH Capital10.184
                
                Assignment,
      dated February 16, 2005, of Registrant’s technology patents ownership from
      CH Capital to Company.10.194
                
                Contract
      between SMTC Manufacturing Corporation and Registrant dated November 9,
      200410.204
                
                Technology
      Reseller Agreement between eLutions, Inc. and Company dated January 31,
      200510.214
                
                Third
      Addendum to the Employment Agreement of John “JT” Thatch dated March 28,
      2005.10.224
                
                Promissory
      Note dated March 25, 2005 evidencing $1,500,000 unsecured short term loan
      to Registrant.10.235
                
                OnScreen
      Technologies, Inc. 2005 Equity Incentive Plan10.246
                
                Employment
      Agreement between the Registrant and Charles R. Baker dated November 21,
      2005.10.256
                
                Employment
      Agreement between the Registrant and William J. Clough, Esq. dated
      November 21, 2005.13.1
                
                Annual
      Report on Form 10-KSB for the fiscal year ended December 31, 2005 filed
      February 24, 2006.13.2
                
                Annual
      Report on Form 10-KSB for the fiscal year ended December 31, 2006 filed
      April 2, 2007.14.15
                
                Registrant’s
      Code of Ethics for Principal Executive and Financial Officers and Code of
      Ethics and Business Conduct Statement of General
Policy.21.1
                
                8-KA
      designating and describing CUI, Inc. as a wholly owned subsidiary of the
      Registrant filed with the Commission May 21, 2008.22.1
                
                Proxy
      Statement and Notice of 2006 Annual Shareholder Meeting filed September
      29, 2006.22.2
                
                Proxy
      Statement and Notice of Special Meeting of Shareholders to increase the
      number of authorized common shares from 150,000,000 to 200,000,000 filed
      May 19, 200622.3
                
                Proxy
      Statement and Notice of 2007 Annual Shareholder Meeting filed November 6,
      2007.22.4
                
                Proxy
      Statement and Notice of 2008 Annual Shareholder Meeting filed July 8,
      2008.31.19
                
                Certification
      of Chief Executive Officer pursuant to Exchange Act Rules 13a-15(e)
      and 15d-15(e), as adopted pursuant to Section 203 of the Sarbanes-Oxley
      Act of 2002.31.29
                
                Certification
      of Chief Financial Officer pursuant to Exchange Act Rules 13a-15(e)
      and 15d-15(e), as adopted pursuant to Section 203 of the Sarbanes-Oxley
      Act of 2002.32.19
                
                Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.32.29
                
                Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
      adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002.
 
 Footnotes
to Exhibits:
 
 1
              Incorporated
      by reference to our Registration Statement on Form SB-2/A filed with the
      Commission on October 26, 2001.
 2
              Incorporated
      by reference to our Report on Form 10-KSB filed with the Commission on
      April 14, 2004.
 3
              Incorporated
      by reference to our Report on Form S-8 filed with the Commission on
      January 15, 2004.
 4
              Incorporated
      by reference to our Report on Form 10-KSB filed with the Commission on
      March 31, 2005.
  29
  5
              Incorporated
      by reference to our Proxy Statement pursuant to Section 14(a) filed
      October 7, 2005.
 6
              Incorporated
      by reference to our Report on Form 10-KSB filed with the Commission on
      February 24, 2006.
 7
              Incorporated
      by reference to our Registration Statement on Form S-8 filed March 12,
      2008
 8
              Filed
      with our Report on Form 10-K filed with the Commission on March 30,
      2009.
 
 Reports
on Form 8-K.
 
 No
reports on Form 8-K were filed during the quarter ending March 31,
2009
 
 SIGNATURES
 
 Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
 
 Signed
and submitted this 8th day
of May 2009.
 
 Waytronx,
      Inc.By:
                        /s/ William J. CloughWilliam
      J. Clough,Chief
      Executive Officer/Presidentby:
                        /s/ Daniel N. FordDaniel
      N. Ford,Chief
      Financial Officer
  30